Exceptional Bank

U. S. apartment dwellers who grumble monthly at the amount of their rent bills, might well take comfort from a consideration of the rent which Commercial National Bank & Trust Co. of New York will soon be paying. Last week this bank contracted to pay rent of almost $500,000 a year for 42 years. Its landlord will be unique Henry L. Doherty; its premises, the first five floors at No. 60 Wall Street (Cities Service Co. building, now being remodeled). Commercial National has signed a 21-year lease with an option for a 21-year renewal. During a prospective 42-year occupancy it will pay $20,000,000 in rent.

Extraordinary is this figure, even more extraordinary is Commercial National's ability to contract for such rental after only six months of business life. The bank was founded at the beginning of the present year--a year notable not for the appearance of new banks but for the disappearance (via merger) of long-established banking institutions. Since April 12, 1926, when Chase National absorbed Mechanics & Metals National, there have been 50 bank mergers in New York. In 33 of these mergers the smaller bank has completely lost its identity. Furthermore, new mergers are constantly expected, with the banking trend unquestionably toward the formation of fewer and bigger banks. Founding of Commercial National as an independent and comparatively small bank was a marked exception to the prevailing tendency.

Exceptional in its character, Commercial National has also been exceptional in its progress. The bank was formed with capital stock of $7,000,000 and surplus of $7,000,000. A late June statement showed deposits of $76,589,035.84, undivided profits of $886,351.04. At this rate the bank, at the end of its first year of business life, will have attracted more than $150,000,000 in deposits and earned more than $1,500,000. It has about $40,000,000 in cash on hand.

This success resulted partly from the character of the directorate, partly from the executive ability of President Herbert P. Howell and his officers, partly from favorable banking conditions. The directorate includes such men as Clement M. Keys (Curtiss-Wright Corp. airplanes), Walter P. Chrysler (automobiles), Lewis J. Horowitz (Thompson-Starrett, skyscrapers), Richard F. Hoyt (Hayden, Stone & Co. and Curtiss-Wright Corp. airplanes), Robert Lehman (Lehman Bros.), William Wrigley Jr. (gum), R. P. Stevens (Niagara-Hudson Power Corp., Morgan utility) and William H. Vanderbilt.

President Herbert P. Howell, onetime Carnegie Steel Co. executive, went from Pittsburgh to Manhattan in 1912 to become vice president of National Bank of Commerce. Here he had ample opportunity to study the workings of a Big Bank of the merging type.* Recognizing the power & potency of the Big Bank, Mr. Howell realized also that its very bigness left room for a smaller bank operating on more of a personal contact basis. So, after long consideration, and with the assistance of the tycoons mentioned above, he got together $7,000,000 for a surplus and sold $7,000,000 capital stock and formed Commercial National. It was designed to cater to persons who still regarded $1,000,000 as a considerable sum and to corporations not yet large enough to be viewed with alarm by the Federal Trade Commission.

The favorable conditions under which Commercial National came into being were the prevailing and continued high money rates. For a considerable period last spring loans to brokers bore interest at from 10% to 15% and time loans were well over 8%.

* Only about a month after Mr. Howell had opened his Commercial National, the National Bank of Commerce merged with Guaranty Trust.